Iqe Share Discussion Threads

[jamesrowe] 24/6/2019 14:02

Thank you pb. So they are still expecting £53M of CAPEX this year - it appears to be full steam ahead on purchase of new machines! :-( Cash appears to be the most pressing challenge this year & next.... apart from lack of customers that is!

[bocase] 24/6/2019 13:52

Thank you Pico.

Nice to see some positives in there.

"Long-term prospects sound

IQE’s dominant position in the outsourced compound semiconductor epitaxy market means it has supply relationships with multiple non-US (and US) customers. It is therefore relatively agnostic to any mid- to long-term shifts in market share at either component or OEM level. For example, it is engaged in initial production activities with two Asian customers who stand to benefit from wireless supply chain shifts. On the photonics side, management expects to start mass production for two additional VCSEL customers in H219, with a further 13 customers at the sampling stage. In addition, IQE is engaging with multiple Asian chip companies on 10G and 25G lasers for data comms. These new business opportunities should mitigate the lack of business from the InP laser chip customer in the medium term.

Valuation: Waiting for destocking to complete

If we restrict our peer-based comparison to the three listed companies offering epitaxy for VCSELs then IQE is trading within the valuation range for these stocks on most metrics. IQE has a much stronger market position than the other three, so trading towards the upper end of this smaller sample seems reasonable. Taking this approach, we see scope for share price recovery once semiconductor supply chains have stabilised and the current period of destocking is over."

[1mthead] 24/6/2019 13:50

From that report:

12/19e 147.2 5.4 0.52 0.0 101.8 N/A

If that £147.2 revenue comes in at the low end nearer £140. Then that profit of £5.4 becomes a loss. And even though revised down, there is a big leap required in 2020 to get back to a normal PE. Still a bit hairy for me. Doesn't take much for the wheels to fall off again.

[picobird] 24/6/2019 13:29

SNF..following link should help you for financial clarity (dated today)



Not being a techie I should like to know more on the lnP issue, is it Macom because they teamed up with GF earlier in the year ?
Apparently lnP lasers on 300mm wafers are a ‘goldmine’ !

[suffersnofools] 24/6/2019 13:15

Lords - the problem is the end of 2019 isn't very far away and those cash flow projections will need to be revised in light of recent events and auditors and nomads are very hot on managing 'going concern' regulations. I'm much happier to buy back in higher with some financial and commercial clarity than buy here without.

[tomduck] 24/6/2019 12:52

I don’t disagree that it might be dead money for a while, but I’m happy to leave it be (it’d only sit in the bank otherwise) and believe it or not i’m actually still in profit at these levels so don’t have that feeling of desperation when sitting on a big loss.

Before this latest warning I did say my time horizon was 2021/22 and that still holds, although i’ve come round to Wendys 😉 way of thinking that the odds of receiving a take over offer must have increased.

[1mthead] 24/6/2019 12:42

Lord - "Active management of all cashflows will ensure the company remains within the limits of its current revolving credit facility in 2019."

But what about 2020? Unless there is a doubling of profit, they are still spending more than earnings. They may need more than credit.

[lord loads of lolly] 24/6/2019 12:39

sf5 - I imagine new reactor purchases will be delayed until further firm orders are received. Their facility currently has some spare capacity, which may well be sufficient for current commissioning clients. Aixtron's share price is close to a 12 month low, having been 25% higher as recently as mid May 19. I personally hope the Financial PR recruit proceeds, as transparency & shareholder trust are in desperate need of re-building.

[dr_smith] 24/6/2019 12:34

sf5. You are right in what you say on words and aspirations versus tangible orders.
On the 5 m/c, minor usage of the large facility, we have the much spoken of "inflectxion point", so different to organic expansion of most business/industry.
We also know of 5g and the world working towards it, so personally I do the inflection point is imbedded in real world change rather than "words" and hopes.

I have been playing with more IOT gizmos that are part of the new generation of products, but will talk on that another time.
Dave

[regasclockwork] 24/6/2019 12:13

Tomduck - 02 May 2019 - 14:51:45 - 25953 of 26843
"I'm of to buy a Q5 after today ;) IQE 94p"

"On a serious note I am delighted to see a very positive day! I do believe the worst is behind us, and I do believe that 20/21 will be great days to be invested in IQE, who knows, maybe 2019 won;t be too bad either..."

"Has Sheepy jumped back on board today or is he waiting for 60p again? ;)" -End-

Many a true word spoken in jest. LOL! Sheepy is possibly waiting for 25p and he could be lucky. You say, "I do believe the worst is behind us". Or in front of us?

[sf5] 24/6/2019 12:02

You might be right, Lord. Can we assume that if demand has dropped off a cliff then there's little reason to buy new reactors which I thought (but could be quite mistaken) are > $1m a throw? I wonder if they'll cancel the recruitment of the high-powered PR bod people were clamouring for.

[lord loads of lolly] 24/6/2019 11:51

Re: Posters expecting an imminent fundraise / cashcall. Assuming management still has any credibility left, their recent RNS's appear to contradict this. 20 March 2019: "Post year-end, the Company secured a three year $35m multi-currency revolving credit facility with HSBC." 21 June 2019: "Active management of all cashflows will ensure the company remains within the limits of its current revolving credit facility in 2019."

[buywell3] 24/6/2019 11:32

buywell thinks that the NASDAQ is now running on fumes

FAANG and Tech stocks to get clobbered once again very soon IMO

[blueflame] 24/6/2019 11:32

Sadly I have sold a fair few this morning and Friday afternoon. Drew has no visibility whatsoever. I fear a fund raise coming and it will be at a discount to the current share price imo. I still feel IQE will have a great future eventually but the short term risk for me has become too great. GLA.

[lord loads of lolly] 24/6/2019 11:30

Sure, IQE's recent guidance has often been of the 'man with a white stick variety'. However, they do say "Active management of all cashflows will ensure the company remains within the limits of its current revolving credit facility in 2019." So assuming they've any credibility left, talk of any imminent cash call would seem premature.

[grity] 24/6/2019 11:25

If they’ve got 90% of the outsourced wafer market now ( pie in the sky imho) the margins must be rock bottom. Even if they doubled out put here share price would only reach £1. Doubling out put is highly unlikely for a long time ,

Can’t throw good money after bad , just sold short of 1/4 million.
GLA.

[r9505571] 24/6/2019 11:24

As Apples profit slows, the only way to combat that is vertical integration so IQE is now a real take over target!

[regasclockwork] 24/6/2019 11:22

Quoinit - 12 Jun 2019 - 06:53:42 - 26537 of 26818

"My guess and it's only that only that , is a move to full listmg, consolidation of shares 2:1 and a fund raise from another placement could be on the cards." -End-

17 Jun 2019 - 22:47:59 - 26598 of 26818

"Cotswold, thanks, you're right , well just ignore regas" -End-

Quoinit23 Jun '19 - 15:40 - 26800 of 26816

"Regas- I predicted that a few weeks ago which you made light of at the time but now seem to be backing it. -End-

Hi nit, I questioned your 'guess' at a 2:1 consolidation - nothing more. Obviously the move to the main market is now 'on hold'. A fund raise/placement at 25p to 30p? What 's your 'guess'?

By the way, you seem to have ignored CotswoldSparky's 'advice' to ignore me. He won't be best pleased with you. Or are you just having a quick peep from behind the curtains? LOL!

[r9505571] 24/6/2019 11:21

Smartphone ownership is growing rapidly around the world! https://www.pewresearch.org/global/2019/02/05/smartphone-ownership-is-growing-rapidly-around-the-world-but-not-always-equally/

[1mthead] 24/6/2019 11:09

And if shorts are closing, that may be the only thing keeping the shares above 50p (just).

[sf5] 24/6/2019 10:54

One thing about Friday's announcement (and possibly other recent ones) was the multiple use of the words "well placed". Essentially that's just aspiration / wishful thinking, until clear signs of concrete orders. Still bemuses me that that leased this huge factory with space for 100 reactors when currently they're producing from just 5 or so. Hard to see where some 20x increase in demand is ever going to come from.

I'm sure we're all aware of the 75% plunge in NANO on Friday, but comments on TechMarketView's daily email this morning hammer home the downside of having APPL as a major customer "But I do realise the ‘issues’. Last week IQE shares crashed as a direct result of the Huawei debacle. On Friday Apple (well, it isn’t confirmed as the culprit..) cancelled a multi-million contract with Nanoco (think next gen cameras for smartphones). This follows on the heels of Apple suddenly pulling the plug on Wolfson, Volex and Imagination."

[bocase] 24/6/2019 10:52

Yes there is no doubt the likelihood of an opportunist bid has increased dramatically and it could come at any time. Even murmurs and rumours could send us quickly back above 70p pre-offer, and for that reason I would not like to be out but continue to hold.

[tomyumgoong] 24/6/2019 10:52

If I remember rightly there's still a gap to fill at around 35p........!

[1mthead] 24/6/2019 10:50

Thanks. Bought my main wedge at 35p but bought many higher, so not without pain, but not calamitous. I reckon my portfolio can absorb this within a year. And I may be back, but I'll need some convincing of the long term outlook.